Half of France's active workforce 'living off state'

A majority of France's active population - some 14.5 million people - are
living off state revenues, claims book by tax expert Jean-Philippe Delsol
called Why I'm Going to Leave France

In the face of rising anger over tax hikes, Jean-Marc Ayrault, the prime minister, this week promised a "total overhaul" of the French tax system, but in the same breath made clear this would not translate into tax cuts. Photo: AP

More than half of the active French population is living off the state, according to figures released in a new book by a tax lawyer seeking to explain why so many of his clients in private enterprise are "leaving France".

With the country teetering on the brink of nationwide tax revolt, Why I'm Going to Leave France, out on Thursday, has thrown more fuel on the fire by suggesting that 14.5 million people out of the country's 28 million-strong workforce are - one way or another - making a living off taxpayers' money.

To reach the mind-boggling figure, the author begins with France's "fonctionnaires", or civil servants, of which there are 5.2 million and whose number has increased by 36 per cent since 1983. These represent 22 per cent of the workforce compared to an OCDE average of 15 per cent, leading him to conclude that France has 1.5 million too many "fonctionnaires".

He then adds the 3.2 million unemployed people in France relying on state benefits, another 1.3 million taking RSA low-income handouts, a further two million in the "parapublic" sector - majority state-owned companies - and more than a million people in state-funded associations such as charities. Under the current Socialist government, there are 750,000 state-subsidised jobs and the author – perhaps arguably - includes a million people in the agricultural sector who rely largely on contributions from European Common Agricultural Policy subsidies.

Although not a direct comparison, figures released by Britain's Office for National Statistics in August found that 80.9 per cent of jobs were in private industry and commerce – a record high of 24.1 million people - and 19.1 per cent, or 5.7 million, were in the public sector.

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Christine Kerdellant, commentator in l'Express magazine, said that even if one questioned the idea of including the jobless in those receiving state revenues, "it's hard not to find these figures arresting".

"In 2009, praise was lavished on the French model as the recession was less deep in France than elsewhere as the state didn't fire people. But this protective duvet, funded increasingly heavily by debt and tax is ending up stifling the country," she wrote.

The book is written in the first person, supposedly by a successful boss of a medium-sized company who decided to move abroad with his wife and children to avoid "being treated like an enemy because I make a good living".

In fact, the narrator is a mixture of around 20 clients of Jean-Philippe Delsol, a tax adviser, who is also an author and administrator of the Institute for Research in Economic and Fiscal Issues, a think tank.

Those fleeing France would only speak anonymously "to avoid reprisals from the tax authorities", he explained.

He said that the figures in his book were only logical. "When you consider that public spending in France now accounts for 57 per cent of gross domestic product, it's only natural that more than half of the active workforce are paid with public money," Mr Delsol told The Telegraph.

The huge nanny state, he said, had "modified the very spirit of (French) society by turning everyone into fonctionnaires".

It has worked until now as France is a "rich old country", but soon "the system will no longer function as there will be less and less people working to support more and more people working less", he argued.

In the face of rising anger over tax hikes, Jean-Marc Ayrault, the prime minister, this week promised a "total overhaul" of the French tax system, but in the same breath made clear this would not translate into tax cuts.

Mr Delsol said he felt compelled to relay the despair of his clients.

"Every time they receive their tax papers, wealth tax declarations and when they try to part with an employee, they say it's just too costly, too complicated. The feeling has been growing for the past year or 18 months." He added: "More and more are now taking this step," putting at 4-5000 the number of French who moved abroad for tax reasons last year.

The rot started under the previous conservative administration, which introduced an exit tax for would-be tax exiles, Mr Delsol said. "Despite this, my clients' reasoning is: 'At least I know what I'll have to pay today, but I have no idea how much I'll have to pay tomorrow. I'm off."